Israel stocks rise, Makhteshim recoups; rates held steady

RobertDaniel

TEL AVIV (MarketWatch) -- Israeli stocks rose on Monday, with gentle advances across virtually all sectors and specific strength in a couple of the banks, as well as Makhteshim-Agan and Teva Pharmaceutical.

The Bank of Israel, after the market closed, said it would make no change in the base 0.5% interest rate for June.

The Tel-Tech 15 Index of top technology issues climbed 0.78% to 173.65.

The most-active issue was Israel Chemicals, the producer of fertilizer and chemicals derived from the Dead Sea, trading up 0.1%.

Agrichemicals specialist Makhteshim-Agan recouped 4.1%. On Sunday, the shares fell after the company said in a statement to the TASE that the board named Erez Vigodman as chief executive, succeeding Avraham Bigger, who remains chairman.

"We view [the move] as positive in light of Vigodman's very impressive managerial record and [because] Bigger will remain actively involved in the company's strategy," Leader Capital Markets wrote in a note Monday.

Among the banks, it was a draw: Hapoalim
BKHYY, -3.90%
rose 1.1% and Leumi advanced 1.3%, while Mizrahi Tefahot
UMZRF
fell 0.5% and Discount sank 2.7%.

The major losers: real-estate developer Gazit Globe, down 3.4%, and Oil Refineries Ltd., down 3%.

Blue Square-Israel, the TA-100-listed supermarket chain, slumped 4.7%. The company reported that net income of 32.3 million shekels ($8.2 million) was about half the 65 million shekels of the year-earlier period. Revenue fell 3.1% to 1.76 billion shekels.

Telecom major Bezeq fell 2.3%. Bank of America Merrill Lynch maintained its buy rating while increasing its price target on the company to 8.8 shekels from 8.1 shekels. Bezeq's shares closed on Monday a little above 7.1 shekels a share.

"Bezeq's first-quarter results came in above our expectations top to bottom," analyst Haim Israel said in a report. "The [47%] spike in net income was all [due] to ongoing operations with no one-off distortions, leading us to believe that it is sustainable."

The central bank said in a statement that its decision to leave interest rates at record lows, plus its interventions buying foreign currency and government bonds, "will help strengthen the economy's ability to cope with the effects of the global economic crisis."

Inflation expectations for the next 12 months -- derived from private forecasts and from the capital market -- are around the midpoint of the Bank of Israel's target range of 1% to 3%, the bank noted.

Data indicate "that the negative trend in economic activity may be moderating. [But] renewed growth is expected only toward the end of the year," the bank said.

Central banks worldwide "are keeping their interest rates low and are focusing on additional monetary tools that they have activated," according to the Bank of Israel statement. "Those that have not yet reached very low levels of interest are continuing to reduce their rates."

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